New York – Taxability of Edible Gummy Drinking Cups

SALT Report 1890 – The New York Department of Taxation issued an advisory opinion regarding whether a Taxpayer’s product qualified as a food product as well as the corresponding exemption. The Taxpayer produces an edible gummy drinking cup that is available in five flavors:  salty, sour, bitter, sweet, and spicy. The gummy cups are made from pectin, evaporated cane sugar, natural flavors, and colors. The cups do not need to be refrigerated however; once the package is opened they must be consumed within a week.

New York provides an exemption for food and food products in section 1115(a)(1) of the Tax Law however, candy and confections are specifically excluded from the exemption.  Therefore, the Department must consider a number of factors when determining if something is a candy, a confection, or a food product, such as: how the product is labeled, packaged, advertised, displayed and sold.

The Department determined that the Taxpayer’s edible gummy cups did not qualify as a food product and are subject to sales and use tax because the Taxpayer advertises the product as an “all-natural pectin confection.”

For Further Information:

New York Department of Taxation – Advisory Opinion TSB-A-12(29)S